It is hard to believe the explosion that has occurred in blogging. I am relatively new to blogging too, but when Pekin Insurance Company, a regional carrier operating in about 5 midwestern states holds seminars about the importance of blogging and insurance agents develping a blog site, blogging is getting out of hand.
As I have stated in an earlier post, blogging about insurance may not be the most exciting topic, but insurance issues are important to the financial well being and peace of mind for families and businesses alike. It will be interesting to see what Pekin Insurance offers as suggestions to their agents. I will be watching, and maybe using any new ideas they offer.
Wednesday, December 6, 2006
Friday, December 1, 2006
'Tis The Season For ... Annuities!
Guest Author: Bill Folkerts, CPCU, CIC
Auto-Owners Insurance Company
With a name like Auto-Owners Insurance, it may seem odd to understand that this Fortune 500 company writes a significant amount of life insurance products, including annuities. Auto-Owners Insurance has been the corporate name since it's origin in 1916 (that's right, we are celebrating our 90th anniversary!) when we began writing solely Auto Insurance coverage to individuals and families. This financially sound carrier has developed into a solid P&C (Property and Casualty) insurance company that writes personal lines and commercial lines accounts. On the Life side of the house, our motto is Safe. Sound. Secure. Our belief is based upon fixed rather than variable investment options which provides greater stability and less risk in an ever-changing marketplace.
One of the greatest wonders of the world is compound interest. Save early - Save often. Using an Auto-Owners annuity and guaranteeing lifetime income provides flexibility and income tax advantages. What a tremendous benefit! Annuitization can guarantee an income that cannot be outlived. And, because of the exclusion ratio, which is a combination of interest and principle, annuitization also helps spread tax on interest over time.
Be careful when comparing Certificates of Deposit to an Annuity. That's like comparing an apple to an orange. Which fruit tastes better to you? Let's find out. CDs typically use APY (Annual Percentage Yield). Auto-Owners uses APR (Annual Percentage Rate). APY, on the surface, seems to offer the better interest rates. But let's take a closer look. If you studied each illustration side by side, you would recognize that the difference is compound interest. Our analysis unveiled that a 3.8% APR equals a 4.1% APY over a five year time period. Over a ten year time period, we calculate a 3.8% APR equals a 4.52% APY. So, it's important to understand the difference between interest rate (APR) and interest yield (APY).
* Tax Planning: Auto-Owners offers tax deferral of interest earnings with their annuities. CDs come with a 1099 ... interest is taxable as ordinary income each year.
* Liquidity: Annuities offer partial withdrawals permissible without penalty. CDs have significant penalty for early withdrawal.
* Guaranteed lifetime income: flexible settlement options are available with annuities which a CD does not offer.
* Estate Planning: Annuities are not subject to probate. CDs are subject to probate.
Is your retirement nest egg Safe. Sound. Secure.?
Safe: Is your current retirement plan free of administrative fees, loads, and management fees?
Sound Tax Planning: Are your accounts taking advantage of possible tax deductible contributions? Secure Retirement Planning: Are your retirement funds with a company rated among the top 2 to 3% of all insurers by the leading independent rating organization?
You, too, can accumulate wealth and enjoy financial security while taking advantage of substantial multi-policy discounts by insuring your Auto and Home with Auto-Owners Insurance. Did you know that we offer a 5% discount on your personal lines account for policyholders who also have a deferred annuity at a minimum balance of $2,000 or more? Our current interest rate starts at 4% and is guaranteed at a 3% rate. For example, let's say you pay $2,400 per year for your auto and home insurance. A 5% discount would save you $120 per year on your personal lines premium. At our current interest rate of 4%, your first year return on your investment would be $80. In total, that is a $200 return ($80 plus $120 P&C savings). Where else can you receive a Safe. Sound. Secure. return on your money for 10%, as illustrated in this example?
Auto-Owners has earned the reputation as The "No Problem" People because we deliver on the promises we make. We will not gamble with your financial well being. Dedicated to the Independent Agency System, Auto-Owners products are brought to you through caring, knowledgeable professionals, who live and work right in your community ... solid individuals like Jeff Luken, CPCU. Please contact Jeff or one of his qualified staff today should you be interested in learning more about Auto-Owners and Annuities!
Auto-Owners Insurance Company
With a name like Auto-Owners Insurance, it may seem odd to understand that this Fortune 500 company writes a significant amount of life insurance products, including annuities. Auto-Owners Insurance has been the corporate name since it's origin in 1916 (that's right, we are celebrating our 90th anniversary!) when we began writing solely Auto Insurance coverage to individuals and families. This financially sound carrier has developed into a solid P&C (Property and Casualty) insurance company that writes personal lines and commercial lines accounts. On the Life side of the house, our motto is Safe. Sound. Secure. Our belief is based upon fixed rather than variable investment options which provides greater stability and less risk in an ever-changing marketplace.
One of the greatest wonders of the world is compound interest. Save early - Save often. Using an Auto-Owners annuity and guaranteeing lifetime income provides flexibility and income tax advantages. What a tremendous benefit! Annuitization can guarantee an income that cannot be outlived. And, because of the exclusion ratio, which is a combination of interest and principle, annuitization also helps spread tax on interest over time.
Be careful when comparing Certificates of Deposit to an Annuity. That's like comparing an apple to an orange. Which fruit tastes better to you? Let's find out. CDs typically use APY (Annual Percentage Yield). Auto-Owners uses APR (Annual Percentage Rate). APY, on the surface, seems to offer the better interest rates. But let's take a closer look. If you studied each illustration side by side, you would recognize that the difference is compound interest. Our analysis unveiled that a 3.8% APR equals a 4.1% APY over a five year time period. Over a ten year time period, we calculate a 3.8% APR equals a 4.52% APY. So, it's important to understand the difference between interest rate (APR) and interest yield (APY).
* Tax Planning: Auto-Owners offers tax deferral of interest earnings with their annuities. CDs come with a 1099 ... interest is taxable as ordinary income each year.
* Liquidity: Annuities offer partial withdrawals permissible without penalty. CDs have significant penalty for early withdrawal.
* Guaranteed lifetime income: flexible settlement options are available with annuities which a CD does not offer.
* Estate Planning: Annuities are not subject to probate. CDs are subject to probate.
Is your retirement nest egg Safe. Sound. Secure.?
Safe: Is your current retirement plan free of administrative fees, loads, and management fees?
Sound Tax Planning: Are your accounts taking advantage of possible tax deductible contributions? Secure Retirement Planning: Are your retirement funds with a company rated among the top 2 to 3% of all insurers by the leading independent rating organization?
You, too, can accumulate wealth and enjoy financial security while taking advantage of substantial multi-policy discounts by insuring your Auto and Home with Auto-Owners Insurance. Did you know that we offer a 5% discount on your personal lines account for policyholders who also have a deferred annuity at a minimum balance of $2,000 or more? Our current interest rate starts at 4% and is guaranteed at a 3% rate. For example, let's say you pay $2,400 per year for your auto and home insurance. A 5% discount would save you $120 per year on your personal lines premium. At our current interest rate of 4%, your first year return on your investment would be $80. In total, that is a $200 return ($80 plus $120 P&C savings). Where else can you receive a Safe. Sound. Secure. return on your money for 10%, as illustrated in this example?
Auto-Owners has earned the reputation as The "No Problem" People because we deliver on the promises we make. We will not gamble with your financial well being. Dedicated to the Independent Agency System, Auto-Owners products are brought to you through caring, knowledgeable professionals, who live and work right in your community ... solid individuals like Jeff Luken, CPCU. Please contact Jeff or one of his qualified staff today should you be interested in learning more about Auto-Owners and Annuities!
Wednesday, November 29, 2006
Safeco Ins: Give Credit When Credit is Due
I had originally plan on this post slamming Safeco Insurance for their mishandling of a policy in my office. Safeco, like most insurance companies want their agents to quote and issue policies online. Online quote and issuance of policies is quicker, cheaper, and requires less underwriting review. If the client fits through all of the online underwriting guidelines, then the policy is quoted and issued. As insurance agencies have become more technologically savvy, agents have generally embraced this concept. It allows us to serve the client faster, therefore better.
Recently we quoted and issued a policy through Safeco. A couple of weeks later our regional office in Indianapolis notified us that the policy in question would be cancelled in 60 days. When we question the reason for cancellation, we were told that there was a programming error and this policy should have never been approved or allowed to issue, therefore Safeco was canceling. We asked another underwriter for help and received the same answer.
My next call was to Mr. Mike Hughes, the Executive Vice President for Insurance Operations. Although after several calls I never did get to speak directly to Mr. Hughes, my message was heard. The underwriting department has agreed that if we (agents) are to use their quote and issue systems, then Safeco must stand behind the information we are given. If the system produces a quote and issues the policy, then Safeco must honor it.
Today I was notified by the regional office in Indianapolis that Safeco will reinstate this policy. Congratulations to Safeco for doing the right thing.
Recently we quoted and issued a policy through Safeco. A couple of weeks later our regional office in Indianapolis notified us that the policy in question would be cancelled in 60 days. When we question the reason for cancellation, we were told that there was a programming error and this policy should have never been approved or allowed to issue, therefore Safeco was canceling. We asked another underwriter for help and received the same answer.
My next call was to Mr. Mike Hughes, the Executive Vice President for Insurance Operations. Although after several calls I never did get to speak directly to Mr. Hughes, my message was heard. The underwriting department has agreed that if we (agents) are to use their quote and issue systems, then Safeco must stand behind the information we are given. If the system produces a quote and issues the policy, then Safeco must honor it.
Today I was notified by the regional office in Indianapolis that Safeco will reinstate this policy. Congratulations to Safeco for doing the right thing.
Monday, November 27, 2006
Real Trees; The Tradition Continues...
Before I get back to insurance issues (starting Nov. 28th) the main topic of this blog, I thought I would share a photo of at least part of the family, my wife, daughter and our two dogs, during our annual Christmas tree cutting. For 25 of the last 26 years we have cut our tree at the same Christmas tree farm about 10 miles from our home. And since this is a "family" event, we must always include the dogs in our outing. My son is taking the picture and I am cutting the tree (a view you probably would not want to see). The only year we did not cut our own tree was in 2003, this first year both kids were gone to school. My wife purchased a fake tree, over my protest, and when the kids came home, they revolted, so we are back to real trees.
For any of the environmentally inclined, this is at a Christmas tree farm. Trees are planted on a farm around grain fields, with the purpose of creating a wind block and generating additional income for the farmer.
Friday, November 24, 2006
Guest Author Coming
On December 1, 2006 I have arranaged for Bill Folkerts, a representative of the Auto-Owners Insurance Company, to be a guest author on this blog. The topic and content will be his to choose. Check back to see what Bill has to say.
Wednesday, November 22, 2006
What am I Thankful For?
I have been so blessed in life, family and health! More blessed than I deserve.
Just thought I show you what I am most thankful for; my two kids JB & Lucy!
Have a Happy Thanksgiving!
Tuesday, November 21, 2006
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